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NEW DELHI: Real administrative measures rather than reforms are required for land acquisitions, approvals and coal issues to revive the investment cycle to lift markets in the long run, UBS said in a report on Monday.

"This would be the key for us to turn bullish for the long term. An improvement in investor sentiment could drive a short-term improvement in India's twin deficits," the report added.

A mild cyclical recovery in the economy is possible in the next few quarters, which should support the current earnings growth estimates. UBS estimates FY13/14 earnings growth for Nifty index companies at 13/14.9 per cent, which appear reasonable given single-digit top-line growth estimates and cyclically trough margins.

Recent government announcements have revived corporate sentiment, which is also a key for the capital expenditure cycle.

The quarter ended September 30th was reasonably strong for most Nifty companies as earnings growth saw a rise of 15 per cent compared to 12.5 per cent expected. However, the year-on year decline in the margins continues to be a broad trend.

UBS is of the view that the Nifty earnings may be bottoming out; an upgrade cycle is contingent on the expected mild economic recovery. The brokerage firm remains tactically bullish on the Indian markets.

However, the investment bank cautions that any economic slowdown, weakening currency, global economic events, and government policy changes may impact their bullish outlook.